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tv   Mad Money  NBC  October 10, 2012 3:00am-4:00am EDT

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especially about polenta. >> can i tell you, it's like a toppings bar, but savory. rick springfield with us tomorrow. i'm jim cramer and to my world. >> you need to get in the game. >> firms are going to go out of business and he's nuts! they're nuts. they know nothing. >> i always like to say there's a bull market somewhere. "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i just want to help you make money. so call me at 1-800-743-cnbc. it's amazing. it's like clockwork.
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three months from now we'll all look back and say to ourselves, what were we thinking, how could we not have taken action? how did we not sell? now to shock you. i actually agree with this kind of admonition, the one that cautions qb? i believe it makes sense. in fact, i do it myself all the time. i just don't do it with the stock market. i do it with my kids.
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when my kids were young bride constantly warn them about things. don't you drink that. you could die of the alcohol poisoning. don't you dare drink and drive. most dangerous thing in the world. if i catch you i will struggle not to be you to a pulp. don't take drugs. don't hang out with those bad kids. every parent knows to see these things. we're imprinted with them. our parents were imprinted with them although they were more likely to let their fists, belts and hair brushes do the talking. they took away the car keys and would have definitely taken away the sell fund. unless it is and iphone 5 in which case they might let you keep it for punishment. you can get away with saying this stuff as a parent because there is no downside. they come home safe, you win. it's not like your kids are
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going to come home and say hey dad, i smoked pot, drank when i was driving. in fact, while i was doing that on i-95 i even tested my worst friends. that doesn't happen. as a parent you can't lose giving that admonishment. you've got to do that. but in this business, many people think you can't lose by a admonishing people to sell either. they could say five years ago today we were way too high, so we're way too high now so you better sell all your stocks because it's the fifth anniversary and you know what you're doing if you don't sell? you are drinking, driving and texting and stored in a blue crystal meth. i can't admonish to dump your stocks because on like my warnings to my kids, there might not be anything wrong with actually buying some stocks when they're on sale. know what the easiest thing to do is today?
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they tell you to sell apple down $12 when it was clearly something from a complete nervous breakdown, a bipolar nervous breakdown. it must have been exactly like the equivalent of saying to your kid, i told you not to have three beers and get behind the wheel. now look what happened. bought apple. they were rebounding to close down just $2. one point it was up 13 points from that low. at personally want those 13 points for a trade. i might want that $620 as my basis for an apple investment. didn't drink 12 captain morgan and co klatt. made 12 points. those are difference. the stock market is not like kids to smoke pot and get arrested and don't get into good schools. stocks are more like merchandise. when i was growing up there was a place called filene's basement in the heart of boston. i didn't have two nickels to rub together although i did have a lot of hair. filene's had this markdown policy where they would take a nice sweater selling for 79 box, which was taking as ransom back there or at least 16 pizzas, and take it down to $59 in the
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basement. tweak you knew that if the thing didn't sell it would go down a little more until it finally sold. the trick was to figure out how low it would go before someone else snared it. i always figured you were getting a good deal down 50%. mom thought down 70%. too often the sweater got down 60% and i missed my opportunity. with filene's, as we were supposed to call it because we were from philadelphia and stupid, there was a sweater for $79 and that was a top to that sweater for certain to be so don't go by your newsletter now. there was a cause to taking action at $79 but there was also a cost to not taken action at $39. the slaughter might have traded ahead of you. then you were cold all winter or you had to pay top dollar for a difference whether. this may drive home a little more. when i was really poor like '79, living in the '77 forde fair
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amount, i went up to reading, pennsylvania, to the vanity fair outlet there they used to make wrangler jeans. and was walking around at joint looking for bargains and sure enough they put up his jeans box, two for $12. i didn't think those must have broken flies or something like a bad zipper. i'd go into the box literally. go ask my sister. she saw it. i grabbed it and leg. sure enough wheat writ the genes in half. that is how you get a broken zippers. i'm not saying that into the market like that. i needed those jeans. i had to go out at night. because jeans were real expensive five years ago they must be expensive now because we're at those prices again. it doesn't depend on the jeans, for heaven's sake? i am urging you to think of stocks the same way you think of that sweater or the jeans. have to do it case by case. alcoa reported tonight, cheaper at $9 and it was $18.
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is cisco cheaper now than it was five years ago? i can play this parlor game endlessly. what matters is what a stock might be worth three months or three-quarters from now, not where the market was five years ago. what matters is the current prospects of that business, not the current price of the dow jones average, which isn't the same 30 stocks it was back then anyway. here is the bottom-line, pundits, i say admonish away, scare the buyers as best you can. reminder of what happened last time someone got drunk and texted a buy order while driving. and going to analyze which stocks have the best prospects, figure if they have been marked down enough, as i will later with my hot stock list, then admonish you to do some buying. billy in pennsylvania, bill? >> my problem is this. i recently bought smokers. the stock has moved up very well recently and my problem is this, however. i understand there is a shortage in their container in the
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folders division. is it because they are selling more coffee than anticipated? how concerned sshould i be? >> this is a great american company that's daunte fabulous job. i was thinking about recommending the stock in a separate piece today because i thought this was not 1-time-only and a nice price break. you are in good time shape with smuckers. let's go to mary in virginia. >> i heard you mention, carmax yesterday on your program. i know it went up in price and i know so many of my neighbors seemed to be buying used cars rather than new this year and i probably will do the same. is this a good time to buy car max? >> i like to buy them after they come in, report a good number. everybody gets excited, they ring the register. when it comes back down you remember and you keep it on your shopping list and then you pull the trigger.
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that's the way we make the biggest money, not after the big move. the past is not the future. ahead to use some bizarre examples. a wrangler pair of jeans, a sweater from filene's basement. i will do any analogy to tell you that a sale is not necessarily a disastrous event, even if it comes five years after the top. mad money right back. >> coming up, food for thought. snack packs, slim jims and jiffy pop. from favorite snacks to healthy choices, maggert foods is behind some of america's biggest brands. after reporting, it went from hot deal to a hot stock. can they continue to serve up more profits? nbc universal's healthy week continues as kramer talks to the sea of next. later, debit or credit? sometimes stocks just want to go higher. all this week kremer is using his over 30 years of experience
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to help you uncover these chosen fields. stick around. jim is reviewing two anointed stocks he's adding to his 4 cue hot list. plus, fuel for thought. energy, our lives revolve around it and so do the market. with concerns about global gross growing, will this commodity wreak havoc on your portfolio or is it primed to heat up? kramer drills down on the technicals when he goes off the charts. all coming up on that money. >> don't miss a second of mad money. follow at jim cramer on twitter. have a question, tweet-tag mad tweets. send an e-mail sim at bunney @ or give us a call at 1-800-743-cnbc. miss something? head to mad money got [ male announcer ] this is rudy.
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it's healthy week here at nbc universal and we talk about trying to stay healthy, there are few things more important than eating the right food. that's why i'm going to highlight a food company that may not be everybody's idea of food for you, although the stock has been good for your portfolio. i'm referring to conagra foods, which you might recognize as the company behind brands like banquet, chef boyardee, hunt's, hebrew national, orval redenbacher, panama, peter pan peanut butter, ready with and the healthy choice series of offerings. that's the reduced calorie brand founded by the former ceo of
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conagra, mike harper, who after suffering a mild heart attack decided there wasn't anything is good for you as well as good tasting in the freezer aisle, so he created the line himself. you probably have some conagra stuff in your kitchen now, given that their products can be fined and 97% of american households. most of these brands are number one or two by market share in their respective categories. conagra reported on september 20th and the company not it out of the park. it was a spectacular $0.09 earnings beat off a 44 basis. when it first came out i thought it was wrong. better than expected revenues, rose 6. 7% year-over-year. the company gave up side guidance for the 20 13th the school year and indicated that, the cost inflation is under control. conagra boosted its dividend the it brings the yield to a bountiful 3. 6%, taking it all the way up to 4%. the stock has given you a 10% run since i recommended it in late june as a play on, the cost inflation. conagra is up about 60% since we spoke with the ceo in july of
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2009. in the last 12 months, and has made acquisitions that are helping to drive its revenue growth. the question is does the stock have more room to run? i think the answer is yes but first we need to check in with the ceo of conagra to find out how his company is doing and where it is heading. thanks for coming on "mad money". >> it's good to be back. >> at one point you were the first guy who said inflation was going to rage and it was going to hurt your company. has it peaked and are you in great shape going forward? >> i can tell you, jim, that inflation was really tough for us in the last fiscal year, and going into this year we expected it to moderate, and it has moderated a bit more than we anticipated. so we're in pretty good shape for this year. >> a lot of people would say i see corn is really high, soy is high, oil is high. what is he talking about, what moderator?
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>> i can tell you that it isn't just the market forces. it really is how proactive we've been in terms of our cost management and our activity. we've got all the dots connected. we've got the organization aligned to be very proactive. we've got a strong runway of productivity and when you put those things together it's enabled us, as you saw in the first quarter, to deliver very good margin improvement. >> i'm holding up healthy choice baked taste lasagna and also the healthy choice greek frozen yogurt. it is healthy week here at nbc. how are people responding to your new or healthy choice offerings? because this is what we see in the future on "mad money". >> i can tell you that healthy choice is a great brand and something that most people probably don't know is that the fda has standards for calories,
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fat and sodium, if you want to use healthy in your brand name, and we are the only brand that can use the word healthy in our name, all law healthy choice. we've been able to get those numbers from a nutrition standpoint to a place that offers a very strong nutritional package, and still maintain the taste, thanks to a very strong r and d. team, both what they do from a flavor replacement standpoint as well as the packaging technologies that we've employed. so that enables us to deliver great taste and great nutrition at the same time. those are both great innovations, those two new products you mentioned. >> while the brand has been around for sometime, has it been gaining steam as people get more aware of what they put in their bodies, often determines how obese they might be, what their heart condition might be like on what cholesterol is like? are these resonant themes among the people who are buying stuff?
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>> it's been a tough economic environment for all of us. so we have been doing pretty well from a marketshare standpoint and it's really based on the innovations that we've delivered. we've brought some things to the marketplace that have markedly improved the quality of the food. i mentioned packaging technology. first was our steaming technology, the café steamers that were introduced several years ago. i believe it was 2008. healthy choice café steamers was the biggest new product of the entire industry of that calendar year. since then, those products, the steaming platform has done really well. we have recently introduced it, you just mentioned, the baked on trays. that's another packaging technology that uses smart trays, which basically allows the consumer to bake a product in the microwave in far less time than would take in the oven, with equal quality. so those kind of innovations
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along with moving into the desert to business on the healthy choice greek frozen yogurt have all helped strengthen that franchise. >> over the last couple years you tried to make a giant acquisition, private label. you've now keyed on making the small but very valuable acquisitions that are immediately bringing things to the bottom line. is this going to be the strategy going forward because you've still got a great balance sheet after the acquisitions you've done? >> we stepped back a couple years ago and said let's have a really clear strategic roadmap as we go forward because frankly we looked in the mirror and said we need to start to transform this portfolio so we can deliver the kind of growth that will deliver the kind of shareholder value that we want to. and because of that, we put together a very disciplined strategy to go after three pillars of growth. we call it our recipe for growth and it's really based on the
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fact that over the last 6 or 7 years we have dramatically improved our upper rating capabilities across all functions, whether it's supply chain, you name it. and we put a big emphasis on cash flow, so you're right, we've got a very strong balance sheet, so when you combine the capabilities and a very strong balance sheets with a clear strategy, that's where this recipe for growth is delivering value for us. in that recipe there is three pillars for growth. one is driving core a jason sees, building off the category we're in today and leveraging that infrastructure. the second is to become the fastest-growing private label company and the 30s to double our international business and we're living up to that strategy. >> you guys have really done a remarkable job in singleserve. is that in part because gasoline is so high, a lot of people want to stay home, they don't want to throw away? they want to that size of food and not have to worry about
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being wasteful and save a little money? >> i can tell you that singleserve is so important because portion control is absolutely the best way to manage your weight. we have all kinds of quantitative evidence that say portion control is the number one thing that you can do to control your weight. we've got 250-plus meals under our healthy choice, marie calendar and banquet labels that are under 450 calories. we really believe portion control is the driver of that. >> you've done a magnificent job. i've been recognizing your stop. didn't expect to see the earnings breakout. thank you so much. >> thank you, jim. >> you want yeild and you want to growth and you want a clear
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path for greater earnings down the road. conagra has all three. stay with conagra foods. stay with cramer. >> coming up, debit or credit? sometimes stocks just want to go higher. all this week, cramer is using his over 30 years of experience to help you uncover these chosen few. stick around. jim is revealing two anointed stocks he's adding to his hotlist. and later, fuel for thought. energy, our lives revolve around it and so do the markets. with concerns over growth gold glover growing, could this commodity recap it on your portfolio, or is it time to heat up? cramer drills down on the technicals when he goes off the charts. all coming up on "mad money". q?
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>> in the fourth quarter of every single year, certain stocks become anointed by the wall street fashion show. growth oriented money managers look at the best performers for the past nine months and figure these stocks will make you do no wrong, and they buy them aggressively until the year is over. it's a game i've seen play out time and time again he i don't see any reason why 2012 would be any different, which is why i introduced the concept to you
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yesterday, and highlighted two of the most obvious anointed stocks, amazon and google, and added them to our fourth quarter hot list. i don't care that they were down. that's what i want, for heaven sakes. that's why i'm going to keep recommending names that fit the profile everyday this week. this pattern is simply to try and too true to be ignored. the next players on the hot list, let me just say that you don't need to like this game in order to profit from it. i absolutely hate it. i loathe the way hedge fund managers chase momentum stocks at the end of every year. they pay ridiculously high prices and they justify their purchases based on what these companies can earn in what's known as the out years. in other words, they're saying yeah, i know, expensive this year, but it's darned cheap on 2016 numbers. i always thought this sort of fuzzy logic was not rigorous.
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however, when you know that tons of money managers are going to be thinking the same way, when you know they're going to be willing to pay through the nose for lots of high-quality stocks with terrific fundamentals, then why not buy those same stocks at the beginning of the quarter if you have their list, if you know their list, so you can profit from their fuzzy, somewhat say lazy logic. why not take advantage of the scary october sale and buy right into the way i would buy a pair of wrangler jeans at an outlet or a wool sweater at filene's basement he allow me to introduce the next two anointed growth stocks to join our fourth quarter hot list. visa up 35% year to date and mastercard up 25%. both of these credit card companies have tremendous long-term growth potential and visibility. when you look at these and mastercard, the stocks are not financials. they don't land any money to any people. the banks do that kind of thing. banks issue the cards.
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instead, visa and mastercard make their money processing payments. every time you swipe your card they get a tiny little transaction fee, about $0.10. to paraphrase senator dirksen, pretty soon you are talking about some real money. ultimately visa and mastercard are plays on one of the biggest growth stories on earth, the worldwide switch from paper to plastic. in the u.s. about 52% of all payments are made in cash so even in america these companies have plenty of room to go. around the world 85% of the payments are in cash, which means they've got an a norma's global opportunity. that's one of the reasons why the growth of electronic payments is expected to increase at a 10 -- $0.12 mac clip worldwide. when you hear that you should be thinking double digit, visa and mastercard, both companies should grow faster than that thanks to more partnerships with financial institutions and more new products. we know that credit cards are no
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longer the cutting edge payment technology. what about come petition from paypal and other companies working with digital wallet offerings? all these products are a long way from being able to compete with visa or mastercard on a national scale, let alone a global one. i do think ebay is a by and my charitable trust owes its because their worth is obscured by the online business that is the old ebay. both visa and mastercard are coming out with their own digital wallet offerings and they have every incentive to make sure they corner the market like a cornered the market for credit cards and debit cards. they hate that cornering term the is antitrust has been after them for a long time. the fact is these companies have market share positions that are practically unassailable. mastercard controls 30% of global credit card volumes. visa is even bigger. 46% of credit card volumes, 59% of global debit volumes. i want to be in this business. these are both iconic american brands.
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they're getting the bulk of their growth from overseas. mastercard gets 60% outside the u.s. visa is 45% international. seeing tremendous growth in places like russia, middle east, africa. i'm not worried about this international exposure because the story is about the credit card revolution and that trumps everything. the rest of the world, especially the developing world, they've still got a lot of catching up to do and that means this is a secular growth story and not a cyclical one. visa and mastercard are not hostage to global economic growth. people in these countries will keep adopting credit cards and debit cards because it's an issue of convenience. they're more convenient than cash. these are about the march of progress and it's not going to be halted by any bad chinese gdp number or disarray about europeans or what to do with the spanish bailout. we know global spending metrics are stabilized in july and
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august after dropping off in the second quarter. things are looking brighter, not gloomier. what else? both companies have pristine balance sheet with vast quantities of cash and no debt. visa is sitting on 2. $3 billion in cash. mastercard has got $5 billion. both have excellent ceos who have a great deal of experience in the financial realm. before that he was in charge of fleet's credit card division, fleet being the big new england bank that was gobbled up by bank of america. how about mastercard to cue the ceo took over in 2009. he's brilliant. he worked at city core for 14 years, became the ceo of asia-pacific operations and work that nestlé and pepsico. the existence of a brand guy who understands the merging markets better than almost any chief executive in the united states. both gentlemen are welcome on this show. the great thing about visa and mastercard is even though they
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run pretty far this year and even though they're within striking distance of their all-time highs, the stocks are actually pretty cheap. i'm not saying cheaper than 2015 earnings the way so many momentum investors are trying with the anointed stocks in the fourth quarter. they're very cheap on those numbers but visa and mastercard are inexpensive on next year's numbers. visa cells for 19 times 2013 estimates. mastercard a we ate team times estimates saying both have rates of 19%. that's why they love these stocks. they're low price, low earnings multiple stocks. how about 16 times earnings for 2014? do you see why the buyers are so relentless? these and mastercard joined the ranks of amazon and google in our fourth quarter hot list. these terrific growth stocks should go higher after we're done with this selling squall. i'm predicting a jackie wilson like step up here because the money managers who already own them will keep buying more shares and increase the size of
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their positions. it happens every year. i'm just telling you how to profit from it by buying visa or mastercard now or play them with deep in the money call options that expire in january, so you can capture the upside of the move while capping a potential downside if things don't go your way. these momentum guys love to pounce on this weakness to run to the sale. they don't freak out and run away from it. this isn't drunker buying. this is stone cold sober, picking away at merchandise that's very rarely put on sale. and rico in michigan. and rico? >> i wanted to ask you about american express teaming up with wal-mart for this bluebird program, if you feel that will give american express a competitive edge against other banks and other similar companies as american express. >> i'm glad you called on this. this is a quintessential kind of doesn't move the needle, really doesn't matter, not in the earnings, american express. you buy the stock on this and a
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quarter is not that good, they take the stock down and you will be saying why did cramer tell me to buy that stock over that wal-mart thing, so the answer is no. let's go to make in california. >> nate in california, boo-yah jim. >> right back at you. >> ticker symbol pay. i know you are not a fan. i'm not particularly either. but after such a hammering over the last few weeks, it comes out again today, they've got a press release. they are down 6% or 7%. is it time to get in? >> isn't this a great call from nate? here is what i do. i first start by looking at a stock that is down and then i say to myself maybe it's reasonable but i need a catalyst to pull the trigger. there isn't one. stay away. you want to profit like the big boys? you've got to think like the big boys. amazon, google, mastercard, visa. these are all hot stocks for
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here until year end. may i suggest you do it in deep in the money calls to cut off your downside. this is the game the big boys are playing right into this weakness. jackie wilson rocks. let's stick around for the lightning round.
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>> it is time for the lightning round. say the name of the stock. i don't know the calls ahead of time. my staff prepares the graphics and late to the sound and the lightning round is over. we'll start with rob in florida. >> boo-yah jim. >> boo-yah skee-daddy. >> my stock is advanced micro devices. they're deep in the mobile chip game. >> i've got to tell you, i don't care what they're getting into. i want you to get out. i don't want you to touch that stock, not now, not ever. bernice in new york. >> i know you've been looking at gilead and a couple of others like tailgate. i was wondering what your impression is of a lumina, it's been off of its highs lately. >> that's a tool company. i like celgene and gilead because they have great drugs in the pipeline. lumina is offered it to be a takeover target. i can't recommend stocks on the basis of that. i say take off half.
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don in colorado. >> jim, a big calarodo though rocky mountain high boo-yah to you. >> let me give you a peyton manning destroyed me on fantasy boo-yah. what's up? >> me, too. >> a specialty chemical company. i can give you dupont, which has a good yield, good management and is less expensive. james in wisconsin. >> hey jim. >> hey james. >> boo-yah. >> boo-yah. >> what is the best time to invest in wwe, before or after wrestlemania? >> how about no time? one of those things, you give me that the either/or, i've got to give you the know because i don't think this stock is worth owning. it's got no growth. a yield but no growth is not enough for me to be tim in georgia. >> a big downtown boo-yah to you.
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i was calling to ask you about facebook. they're going up or down? >> look, there is going to be a couple lockups that expire where there is going to be hundreds of millions of shares coming to you. to opine on this stock ahead of that is a mistake because i think lower prices back in. austin in pennsylvania. >> thanks for taking my call. about 15 years ago we owned something at the cost of about $30. we sold for a small profit today for $370. today we owned some home depot. do you see that kind of run with home depot? >> that was an amazing stock. my charitable trust, which you can follow along by subscribing, stephanie link and i worked together, think that home depot is inexpensive. it got hurt today because owens corning blew up, reporting a terrible number. i know home depot. it is no owens corning. let's take another.
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let's go to bob in kentucky. >> jim, bob from kentucky. i've been a fan of yours for a long time. >> thank you. >> calling about century link. >> century link has a terrific yield. right now it's in yielding 7%. i think the business is a good one. it's got just enough growth that i'm going to recommend you buy it. that is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade. >> was today's rally the real i have a cold, and i took nyquil, but i'm still stubbed up. [ male announcer ] truth is, nyquil doesn't unstuff your nose. what? [ male announcer ] it doesn't have a decongestant. no way. [ male announcer ] sorry. alka-seltzer plus fights your worst cold symptoms plus has a fast-acting decongestant to relieve your stuffy nose. thanks. [ male announcer ] you're welcome. that's the cold truth! [ male announcer ] alka-seltzer plus. ♪ oh what a relief it is!
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>> was today's rally the real
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deal or just a big head fake? crew despite a $3 courtesy of turmoil in the never-ending powder keg that is the middle east. if you look back, the price of oil has just been crushed. $10 a barrel. what's right, today's surge or last month's selloff? tonight we're going off the charts to answer that question with the help of carley garner, author of a traitor's first book on commodities as well as a senior analyst and my colleague at the street epi become more impressed as i read garner's stuff regularly. garner has an interesting theory so to see where she's coming from, check out this chart of texas intermediate futures. when the middle east gets all crazy, speculators love to play around with the oil futures. these commodity speculators have very short attention spans and after the initial burst of buying the speculation often wanes. traders liquidate their
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positions which leads to him tense selling pressure. that's what happened in september. speculators piled into the oil futures off of the violence and tragedy in libya and egypt and rang the register. that's all a review. the most important thing right here is that despite today's strength, garner believes the selling is not yet done. she think's oil is going lower, perhaps a lot lower. the big reason for that has to be what you see at the bottom of the chart. new indicator. every week the cft, it is future trading commission compiles data and issues a report on the net open positions of commodity traders. it's called the commitments of traders report and they identify traders as being long or short while also breaking them into three categories -- large speculator, small speculator and commercial hedger. keep those in mind to be we have all this data. who is really batting which way
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on oil? the largest speculative group is made up of managed commodity funds and superrich individuals who speculate on oil. not to hedge. these guys refer to themselves as the smart money but there is not a lot of evidence that supports that appellation. they have deeper pockets than smaller speculators. what do they tell garner? it can be extremely helpful identifying overcrowded trades, meaning potentially bad trades because the crowd is already too large to be right. garner sees a very overcrowded trade. this large spec is green. the commitments report friday painted a picture of a speculative community that's still significantly long the crude oil market, despite the correction from over $100 a barrel at $92 and change. taken last tuesday, speculators held nearly 216,000 net long futures contracts. granted all these longs look pretty smart today with the big oil spiking today's session. according to garner, positions
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in excess of $200,000 have increased the odds that these big institutional players will liquidate their holdings, meaning we could get a major selloff. in other words, a lot of big speculators crowded into the oil futures and the trade starts going against them. they're going to bail at the same time which will make any potential sell off much worse. if that happens, how low could the price go? garner believes we could be on the cusp of a wave of selling similar to what happened in may. we know may was real bad. perhaps not as panicked or volatile. she thinks a trip down to $80 a barrel could potentially be in the cards. oil is a very strong floor of support at around $88.50 and it's still more than four points above that level but if it rakes down the next stop is $80, where that is the floor that she's indicating. if crude holds above that level
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she believes it's possible it could bounce. maybe it bounces as high as $97. if that happens you opportunity to sell into strength to cause she thinks the bounce will only become pereira headed back. why is she so negative about this chart? check out the relative strength indicator. this is a directional momentum indicator that technicians often used to predict changes in the trajectory of security before they happen. right now it's trading in the middle, just under $50, heading lower. this reading suggested a moderately heavy market but more importantly that oil has yet to reach oversold levels. you can see the same thing and here is another new one. the williams percentage are indicator at the very bottom. another momentum indicator developed by a commodities trader by the name of larry williams to be similar to the stochastic oscillator we talk about. it measures the underlying opportunities but and sold.
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the oscillator is still right in the middle. not oversold. not that big a bounce coming. garner believes that like mr. t. and perhaps his greatest role of all time, playing cover line, this indicator predicts pain. garner acknowledges that she could be dead wrong. these technicians like to tell you what could go wrong here. oil is going to be headed higher it and if she's wrong, 10 $6.50 marks the high end of this recent trade. garner doesn't think she's wrong. it's a probability thing. probabilities are not that way. oil's daily chart is pretty darn hideous. you can see in the daily this is just an ugly picture. oil has formed a sharp descending wedge. technicians hate a dissenting wedge which suggests that oil is going lower. within the wedge, oil is $88, very close to the floor of the weekly chart. if it breaks below that level the next stock is the same as the weekly.
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the average convergence/d. versions. this is a moment an indicator that shifts in a security trajectory. the indicator says the path of least resistance for oil is decisively lower a cross that line. this is a key part of the whole equation. remember, the price of oil is denominated in dollars so when the greenback get stronger, oil gets with heat. the bottom could be heading substantially higher. this is a very crucial moment for her and that would be bad news for oil the bottom line, based on currently garner's interpretation of the charts, we should not get too excited about today's rally in oil. we should sell it because she thinks the price of crude is not done going down. crude is still a long way from being oversold and a possible uptick in the dollar could be devastating for the price of oil.
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garner's work makes me want to be more cautious about crude, maybe lighten up on some of those oil stocks. don't forget what's bad for oil is real good for the consumer. "mad money" is back after the break. [ dog 1 ] i am not a vegetarian! yeah, i might have ears like a rabbit... but i want to eat meat! [ male announcer ] iams knows dogs love meat. ...but most dry foods add plant protein, like gluten iams never adds gluten. iams adds 50% more animal protein, [ dog 2 ] look at me! i'm a lean, mean flying machine [ dog 1 ] i am too! woo hoo! [ male announcer ] iams. with 50% more animal protein. [ dog 2 ] i'm an iams dog for life. not a rabbit. woof!
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>> i had a great call last night from an 80-year-old woman who pretty much crystallizes what's going on in the stock market. she has certificates of deposit rolling over that pay 5% the pc knows the current cds won't pay
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close. she went on my blessing for johnson and johnson. i said yes because i like the yield, the management and the balance sheet. i would never suggest an 80-year-old woman use j. and j. is a certificate of deposit. they have a lot better than the return from the rates she would get if she simply rolls them over and it is among the most impressive brands on earth. it doesn't have the earnings power you'd like to see but it is pretty darn clear that if you broke the company up it is worth more than its current value. this question represents the desperate shape of investors who seek a fixed income replacement in this era of fed mandated low rates. johnson & johnson only has to go down $2.50 to make the terms better and that could happen in the blink of a high-frequency trader's eye. somehow i think it's reckless to keep. in the exact same show where i interviewed the chairman, president and ceo of medical
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properties trust, a real estate investment trust that owns hospital buildings and leases them to hospitals. same show. the real estate investment trust yields 2.7%. that would normally serve as a terrific fixed income alternative. i couldn't bring myself to suggest it as i would fear that something would go wrong with medical properties trust and it would be on. if something went wrong with j. and j. it would be on them. this is when people say there is a bubbling higher-yielding stocks, they should remember this woman's call epc has need of income. she can't get it from cds. why not go with j. and j.? why not go for medical properties trust is the stock should only be yielding about 5%? either one is better than the cd alternative. it really is that simple. stick with cramer. 5-hour energy supports the avon foundation for women breast cancer crusade. so i can get the energized
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>> two out of three ain't bad. okay, yum was real good. i like the china number. i think that alco is just fine.


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